a a}: CENGAGE \\ MlNDTAP Homework (Ch 21) FANCY DINN ERS The initial budget constraint (3C1) shows the Gaffneysr budget constraint when the price of a fancy dinner is $100. At this price, Eric and Ginny would choose to consume ve fancy dinners. Suppose that the price of a fancy dinner decreases to $50, shifting their budget constraint to 3C2, which represents a new relative price of five diner breakfasts per fancy dinner. (Hint: The blue line labeled H is parallel to 3C2 and tangent to I; at point B.) In order to remain as happy as they were before the price decreasethat is, to consume at some point on the same indifference curve as they were on initially (11 )the Gaffneys' income spent on fancy dinners and breakfast at diners would now only have to be-. However, in reality, rather than maintaining their original level of utility, the Gaffneys choose the optimal bundle along their new budget constraint. At this point, they are V off than before the price change in fancy dinners. k